SIE practice questionmediumClosed-End Funds
Shares of a closed-end fund may trade at a discount to NAV for which primary reason?
- AThere are no brokerage commissions
- BNAV is the same as the market price by law
- CFund managers must buy back shares
- DMarket supply and demand influences share price✓ Correct answer
Explanation
Why D — Market supply and demand influences share price
A is correct; supply and demand in the secondary market determines the market price, which can deviate from NAV. B is incorrect—market price and NAV are not required to match. C and D are inaccurate.
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